Gold price is under pressure amid dwindling rate cut expectations. Nonetheless, economists at Commerzbank see only limited further downside potential.
“Hopes of any rate cuts in the US in the near future have been dampened this week, thereby weighing on the Gold price. A new US labour market report will be published at the end of next week. If it shows a further cooling, as many observers anticipate, this would likely reduce rate expectations, especially if a compromise were to be reached in the US debt dispute, allowing economic indicators to determine the interest rate trajectory again.”
“By contrast, the development of physical demand in Asia, as evidenced by Swiss Gold exports and Chinese Gold imports from Hong Kong, is hardly likely to influence prices, especially as exports and imports will probably turn out to be somewhat weaker given the high price level.”